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Myths and Facts about U.S. EPA Standards

WRI experts take closer look at some of the myths, inaccuracies, and misinformation surrounding Environmental Protection Agency regulation of greenhouse gases.

In recent months, the debate over U.S. Environmental Protection Agency (EPA) regulations of greenhouse gas emissions took on a heated tone across the country. At the federal level, the Senate voted down several amendments (detailed summaries available here) that would have restricted EPA’s ability to regulate dangerous greenhouse gas (GHG) pollution. During the same week, the U.S. House of Representatives passed a bill that would severely restrict EPA’s authority to regulate GHGs, while taking the highly unusual step of overturning a scientific finding.1 Meanwhile, opponents of pollution controls continue to press for further debate and additional votes on bills that would restrict or eliminate EPA’s authority.

Throughout the debate, some of the loudest voices have argued that EPA’s actions would be harmful to industry and the economy. Looking closer, however, we find that these claims are largely inaccurate – many of them are exaggerations or, in some cases, outright misinformation. WRI analysts set the record straight.

Myth #1: EPA does not have the authority to act on greenhouse gases.

The Facts: EPA is legally required to act, and is acting consistent with the authority that Congress has granted it.

EPA, Greenhouse Gases, and the U.S. Economy

As the U.S. Environmental Protection Agency uses its authority to limit greenhouse gases and other pollutants, members of Congress are wondering what these rules mean for the people and industries in their states. In this series, the non-partisan World Resources Institute examines pending actions and what they mean for the U.S. economy:

EPA is acting to fulfill its obligations under the Clean Air Act, as charged by Congress and reinforced by the Supreme Court decision Massachusetts v. EPA. In that decision, the Supreme Court ruled that GHGs are air pollutants under the Clean Air Act. The court instructed the EPA to decide whether GHG emissions endanger public health and/or welfare, or if current science is too uncertain to make a reasonable judgment. In response to the Supreme Court decision, the EPA issued a scientific finding that “[t]he accumulation of CO2 and other greenhouse gases in the atmosphere can lead to hotter, longer heat waves that threaten the health of the sick, the poor, the elderly - that can increase ground-level ozone pollution linked to asthma and other respiratory illnesses.” This finding reflects similar statements made by the world's leading scientific institutes.

Furthermore, laws require EPA to act reasonably. In the Clean Air Act and its amendments, Congress established limitations on EPA's regulatory powers, requiring the agency to consider the cost of regulation and other impacts before regulating. In addition, federal courts review EPA regulatory actions to ensure the agency has not exceeded its authority. In practice, EPA has followed the rules and also been cognizant of the practical constraints of regulations. For instance, EPA decided in the tailoring rule, issued in 2010, that it would be unworkable to apply the Clean Air Act to all facilities that would be covered by the law; instead EPA has focused only on the largest emitters.

Myth #2: EPA regulations of GHG emissions will cost up to 1.4 million jobs.

The Facts: The modeling study and accompanying testimony supporting these claims has been discredited by a number of well respected analysts and economists.

In her February 9th testimony before the House Committee on Energy and Commerce, Dr. Margo Thorning relied on an industry-funded modeling exercise to conclude that EPA regulations of GHG emissions would lead to up to 1.4 million job losses in the United States. Since then, these alarming job-loss numbers have been cited repeatedly by anti-EPA interests – industry, policy-makers and others
– despite the fact that they are based on faulty modeling assumptions that have been discredited repeatedly by leading economists and analysts.
In a recent joint statement by James Bradbury (WRI) and John “Skip” Laitner (ACEEE), Dr. Thorning was called into question for filing with the Energy and Commerce Committee the same discredited arguments for which she had been criticized by Nathaniel Keohane2 and Dallas Burtraw3 just months earlier at the U.S. Court of Appeals. Dr. Thorning and those who rely on her unsupported jobs numbers have still not explained the basis for their assumption that a business-as-usual policy scenario is always optimal and that any public policy – including energy efficiency policies – can only slow economic growth and yield net job losses (an assumption that the economic literature has repeatedly shown to be false)4. The vocal anti-EPA interests who rely on Dr. Thorning’s opinion have yet to provide any evidence that the EPA’s preconstruction permitting process – which has been in effect for the past four months – will lead to any net costs for U.S. manufacturers, nevermind job losses. Dr. Thorning has also failed to provide any supporting evidence for her claim that U.S. manufacturers have done all that they possibly can to increase their energy productivity and that public policy has no role to play in removing barriers or otherwise increasing private sector investments in industrial energy efficiency.

Myth #3: EPA standards will hurt U.S. manufacturers.

The Facts: EPA regulations can help U.S. manufacturers make important upgrades.

EPA's guidance can spur energy efficiency upgrades for manufacturing facilities in the United States. In addition to making them cleaner, these much needed efficiency improvements can result in significant cost savings for manufacturers. The manufacturers most exposed to risks from international competition and volatile fuel prices have the most to gain from efficiency. Studies have estimated that efficiency upgrades made with existing technologies could result in a 40 percent total energy savings for these companies.

Myth #4: Current EPA regulations will affect small businesses and farms.

The Facts: Only the biggest emitters will be affected.

Contrary to industry complaints, the greenhouse gas regulations will only apply to the largest emitters in the United States, such as new and modified power plants and industrial facilities. “Mom-and-pop” stores, hospitals and other small businesses remain unaffected by the regulations. Furthermore, the EPA administrator has indicated that there are no plans to regulate these sources.

Myth #5: EPA is imposing a “train wreck” of regulations that create deadlines that are difficult for industry to meet.

The Facts: The number of new regulations is small, and industry has known they were coming for years.

The electric power sector has had substantial notice--in some cases decades--that power plants would be subject to regulations to control dangerous pollutants. Half of the regulations under consideration by EPA have been in the regulatory pipeline for over a decade. Due to administrative delays and litigation resulting in court decisions remanding or vacating previous rules, many of these rules have not been finalized or the final rules were reversed. In many cases Congress has set statutory deadlines for EPA to act, EPA has missed the deadlines, and courts have ordered EPA to act.

A graphic circulating on Capitol Hill and in state legislatures claims a difficult regulatory timeline for industry. But upon closer examination, WRI found that many of the rules they claim refer to rules already in effect, remanded by courts, or don’t exist for other reasons.

EEI timeline

[img_assist|nid=11877|title=Environmental Regulatory Requirements For the Utility Industry, Removing All But New Compliance Obligations|desc=|link=node|align=center|width=600|height=439]

Myth #6: Reliability of the electric grid will be impacted by EPA standards.

The Facts: The electricity industry has the tools to ensure that the lights stay on.

While there may be power plant retirements as a result of EPA standards, industry, states and federal regulators have numerous tools to ensure that all regions of the grid have sufficient power plant and other capacity (such as demand-reduction capability, transmission reconfigurations) to ensure that reliability requirements are met. Undoubtedly, some work still needs to be done to make sure that appropriate parties – power plant owners, state and federal regulators, regional transmission organizations, demand-side service providers, investors, and others – take action expeditiously and make prudent decisions. Nevertheless, the actions necessitated by the proposed EPA regulations are manageable and will render the resulting fleet of power generators more efficient and with lower emissions.

Myth #7: EPA standards will be expensive.

The Facts: The benefits of EPA regulation have historically outweighed the costs.

The White House Office of Management and Budget recently reviewed federal clean air and water regulations from October 1, 1999, to September 30, 2009 in its thirteenth annual Report to Congress. The report found that the estimated aggregate annual costs of these regulations range from $26 to $29 billion, while benefits range from $82 to $533 billion. Furthermore, researchers from University of Massachusetts Amherst found that compared to overall spending in the economy, on a per dollar basis, spending on environmental protection and clean-up employs more than twice as many workers in construction and 25 percent more in manufacturing.

The Endangerment Finding is a scientific finding by the EPA Administrator that greenhouse gases threaten the public health and welfare of current and future generations. See: Endangerment and Cause or Contribute Findings for GHGs under Section 202(a), 74 Fed. Reg. 66,496 (Dec. 15, 2009). ↩

Keohane, Nathaniel. Declaration to United States Court Of Appeals For The District of Columbia Circuit, October 30, 2010. ↩

Burtraw, Dallas. Declaration to United States Court Of Appeals For The District of Columbia Circuit, October 25, 2010. ↩